Start-up fund to create 11,000 jobsLocal banks have invested an additional 345 billion won ($303.8 million) into start-up support. Based on past results, the latest funding could yield 11,000 jobs, D.Camp said on Wednesday.
In 2012, 18 local banks teamed up to create and invest 500 billion won into D.Camp, a non-profit organization that supports early-stage start-ups. They decided to pour another 345 billion won into the non-profit in April.
A total of 320 billion won of the total is being allocated to a private investment firm, K-Growth, to create a fund specializing in local start-ups. K-Growth will pull in other investors to join the new fund, with the total size targeted at 1.6 trillion won.
The remaining 25 billion won will be utilized by D.Camp for the running of its co-working space and for the organization of various training and meet-up sessions for start-ups.
D.Camp analyzed the number of jobs created by start-ups that received investments from the non-profit and K-Growth in the past in order to calculate how many jobs the new investment is likely to create.
“K-Growth’s fund will produce 10,080 new jobs, while D.Camp’s support can add 960 to that figure, so the total will come to about 11,000” in the next three years, said D.Camp head Kim Hong-il at a press event in southern Seoul.
D.Camp began investing in and incubating early-stage start-ups in 2015. Among 121 start-ups it invested in, 86.4 percent, or 110 companies, managed to survive and expand from seed stage. This is higher than the local survival rate of 38.2 percent and the Organization for Economic Cooperation and Development’s average of 57.2 percent.
The enterprise value of the companies increased an average of 282 percent after receiving D.Camp investment. Among the 110 surviving today, 37.3 percent weren’t generating any revenue at the time the non-profit decided to participate.
Kim said a big factor in keeping D.Camp’s success rate high is its monthly demo day, in which start-ups compete and present their businesses in front of other start-up entrepreneurs and investment managers at D.Camp. For teams with good evaluation results, D.Camp recommends investment and support.
“D.Camp started out as something more like a social responsibility program, but today, we see it as a long-term investment for the country’s economy,” he said. “Start-ups nowadays offer services and products that even customers didn’t know they needed. That kind of innovation is something large-sized companies can’t do.”
BY SONG KYOUNG-SON [firstname.lastname@example.org]